A Delaware federal bankruptcy judge yesterday approved a bankruptcy sale of Halt Medical designed to keep its Acessa uterine fibroid treatment on the market.
The Brentwood, Calif.-based women’s health company filed for Chapter 11 bankruptcy protection in April, citing assets valued at $2.2 million as of March 31 but liabilities of about $156.3 million, including a $497,000 severance payment to former chief executive Jeffrey Cohen.
Halt, which employs 17 workers, lined up an acquirer to float a $4 million bridge loan to sustain operations during the sale process to stalking horse bidder Acessa Health. Most employees will transfer to Acessa Health, leaving the Halt Medical shell behind for a Chapter 11 wind-down.
CEO Kim Bridges told MassDevice.com today that Judge Laurie Selber Silverstein yesterday approved the sale to Acessa Health, clearing the way for the deal to close some time this month.
“The company is extremely pleased with the court’s approval of our transaction, which will permit the Acessa procedure to continue under a new company name and newly-recapitalized Acessa Health. We have committed investors and a strong platform to change the standard of care for women who suffer from symptomatic uterine fibroids,” Bridges told us.
The problems at Halt began in earnest in January, when its main backer, private equity shop American Capital, was acquired by a larger PE player named Ares Capital. Bridges, who took over as CEO in March 2016, said that American Capital soon decided to stop financing Halt; a subsequent search for a white night proved fruitless, she told us in April.
“Ultimately, there were no practical alternatives other than a sale process carried out through Chapter 11, with a buyer who is committed to our mission and who has agreed to provide interim financing,” Bridges said.
An unrelated lawsuit, filed in the Delaware Chancery Court by a group of minority shareholders, alleges that American Capital, Cohen and his former management team executed a “squeeze-out merger” aimed at diluting the minority owners’ stake and increasing their own.
In February Halt logged a reimbursement win that extended coverage of Acessa under Medicaid to patients in Texas, Ohio, Michigan, Indiana and Washington, D.C.